HP Makes Wise Bet on Metal 3D Printing, But Faces Significant Competition

Only time will tell whether Hewlett-Packard (HP)’s bet on metal 3D printing will prove to be a sound business investment. Right now, the news is certainly generating a lot of buzz, resulting in questions from several clients asking for our signature “Lux Take,” analyzing the situation and providing a data- and fact-based opinion on what to do and how to interpret this development within the broader 3D printing landscape.

Lux analysts with expertise in materials and manufacturing technologies evaluated the news along technology and business strategy dimensions. Here’s what we found:

Technology

  • What HP says:
    The technology is called HP Metal Jet, HP claims it is 50 times faster and significantly cheaper than other 3D printing methods. Here is a video of how the technology works.
     
  • What we think:
    HP’s printer sprays fine metal powders in precise patterns with binding agents jetted by a print head, followed by a second vertical head that spreads the next layer of powder on top. After printing, parts go through the usual post-processing and polishing processes. While HP’s technology is undoubtedly faster than incumbent sintering-based metal 3D printing methods, there is very likely a tradeoff in mechanical performance due to the lower part density of parts made using binder-jetting technologies (where parts are basically “glued” together) compared to those fabricated by sintering. Also, the 50x improvement in productivity claim does not include the requisite post-processing. What’s more, it’s worth noting in the footnotes of HP’s press release that its cost claims compare its targeted 2020 printer price to competitors’ prices today.

     

Business Strategy

  • What HP says:
    HP is working with GKN and Parmatech on 3D printing metal parts for the automotive and medical industries; Volkswagen, Wilo, Primo Medical Group, and Okay Industries have already placed orders. HP says it will begin offering 3D metal printing production services in 2019. The printers will be available for sale in 2020 at a price of $400,000. 
     
  • What we think:
    The current “service-then-sell” model is a common strategy that makes sense, and HP will most likely be tweaking the printer behind the scenes as it gets feedback from initial service users. However, a potential key challenge is that printing service users and production-scale 3D printer buyers could have different purposes, as the former often does not require large production volumes, but the latter does. Therefore, HP’s early service-users might not become printer-buyers in 2020, nor will all of their feedback be directly relevant to hitting the target value proposition of potential printer-buyer customers.

Overall, given the commercial traction generated from its Multi Jet Fusion-based polymer 3D printers, it is not surprising that HP decided to venture into metal 3D printing, which we see as a faster-growing space than polymers. (Lux members can read the members-only report “3D Printing Market Forecast: 2017 Edition”). While its current business model and open-materials platform strategy appear prudent, HP faces competition on many fronts, including metal 3D printing leaders like GE and EOS that have a long head start, as well as fast-moving start-ups like Desktop Metal that are also developing binder-jetting-based processes. Ultimately, HP’s value proposition and market potential in metal 3D printing will depend on its system’s technical capabilities, which have yet to be proven.

If you are interested in more information about Lux and our 3D printing expertise, please contact us.

 

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